12 Reasons To Buy Real Estate Overseas

12 Reasons To Buy Real Estate Overseas

Buying a piece of property in another country is a good strategy for diversifying your investment portfolio, but it’s much more than that, too.

This isn’t like investing in a stock. You don’t buy a beachfront lot or a rental condo overseas and then set it on a shelf, as it were, to wait for its value to increase. An investment in foreign real estate requires active and ongoing management and administration, including visits to the property and establishing an infrastructure of support on the ground in the place where the property is located.

The result is that, while you’re diversifying your portfolio and potentially increasing your net worth, you’re also reinventing your life. I’d say that this, in fact, is the real upside to foreign real estate as an investment class.

12 benefits of owning property overseas

Own a second home in the sun. If you’re in the market for a vacation or second home, taking your search overseas can mean spending US$80,000 for a house on the beach in Brazil rather than US$500,000 for a home on the beach in New Jersey. For many, buying abroad is what makes it possible to afford a second home at all.

Retire abroad for pennies on the dollar. As a retiree with a home of your own in the overseas retirement locale of your choosing, you can take advantage of a super low cost of living, as little as US$1,000 per month or less.

Enjoy a rich cultural experience. Owning a home of your own overseas makes you truly a local, meaning a richer cultural experience.

Achieve true investment diversity. If you have a “diverse” portfolio that’s all invested in U.S. markets, then your eggs are, in fact, still in one basket.

Benefit from currency diversity. Just as having all of your money in U.S. markets means you’re at the mercy of a single economy, having 100% of your investments in U.S. dollars means your investment future is fully dependent on the fate of the U.S. dollar.

Earn an income abroad. A rental investment in another country can generate an income stream (cash flow) that’s independent of the U.S. economy and, best case, denominated in another currency, as well. A top choice for this kind of investment right now would be Medellín, Colombia. The cost of buying in Medellín is low, and returns can surpass 10% annually. Further, the currency of Colombia is the Colombian peso, making this a non-U.S., non-U.S.-dollar income stream.

Deduct travel costs from your taxes. The cost of every trip you take to visit and manage your investment properties overseas can be tax-deductible.

Enjoy the security of a hard asset. In the current climate, hard assets are the most sensible investment class and the best choice for securely storing value. As real estate investors are fond of saying, the value of your property can’t go to zero…unlike your stock in Pan Am, Enron, or EToys.com.

Profit from the world’s agriculture boom. Some of the most solid investments over the past few years have been agricultural. The world’s population is exploding…while the amount of available farmland is shrinking. Expanding demand and limited supply add up to a smart play that’s only going to get smarter.

Store your wealth privately. Real estate overseas is one of but two remaining asset types that an American need not report to the IRS every year, meaning this is an opportunity for you to store and grow wealth privately.

Take advantage of international asset protection. Having assets offshore makes them harder to get to. A deliveryman who trips on your sidewalk can probably get his hands on your bank accounts and maybe your IRA, but it’ll be much more difficult for him to lay claim to your condo on the beach in Panama.

Open the door to foreign residency. Owning property overseas can give you a “foot in the door” to the country where the property is located. It’s another place where you can hang your hat. And in many countries, owning real estate locally qualifies you for a residency visa.

Kathleen Peddicord has covered the live, retire, and do business overseas beat for more than 30 years and is considered the world's foremost authority on these subjects. She has traveled to more than 75 countries, invested in real estate in 21, established businesses in 7, renovated historic properties in 6, and educated her children in 4.

Kathleen has moved children, staff, enterprises, household goods, and pets across three continents, from the East Coast of the United States to Waterford, Ireland... then to Paris, France... next to Panama City, where she has based her Live and Invest Overseas business. Most recently, Kathleen and her husband Lief Simon are dividing their time between Panama and Paris.

Kathleen was a partner with Agora Publishing’s International Living group for 23 years. In that capacity, she opened her first office overseas, in Waterford, Ireland, where she managed a staff of up to 30 employees for more than 10 years. Kathleen also opened, staffed, and operated International Living publishing and real estate marketing offices in Panama City, Panama; Granada, Nicaragua; Roatan, Honduras; San Miguel de Allende, Mexico; Quito, Ecuador; and Paris, France.

Kathleen moved on from her role with Agora in 2007 and launched her Live and Invest Overseas group in 2008. In the years since, she has built Live and Invest Overseas into a successful, recognized, and respected multi-million-dollar business that employs a staff of 35 in Panama City and dozens of writers and other resources around the world.

Kathleen has been quoted by The New York Times, Money magazine, MSNBC, Yahoo Finance, the AARP, and beyond. She has appeared often on radio and television (including Bloomberg and CNBC) and speaks regularly on topics to do with living, retiring, investing, and doing business around the world.

In addition to her own daily e-letter, the Overseas Opportunity Letter, with a circulation of more than 300,000 readers, Kathleen writes regularly for U.S. News & World Report and Forbes.